Arizona Governing Committee v. Norris

Petitioner
Arizona Governing Committee for Tax Deferred Annuity and Deferred Compensation Plans on behalf of deferred compensation and retirement plans
Respondent
Nathalie Norris, on behalf of employees receiving benefits from employee-sponsored retirement plans
Petitioner's Claim
That the state's retirement plan did not violate the Civil Rights Act in paying lower benefits to women than to men, because of women's longer life expectancy.
Chief Lawyer for Petitioner
James H. Geary
Chief Lawyer for Respondent
Louis J. Caruso
Justices for the Court
William J. Brennan, Jr., Thurgood Marshall (writing for the Court), Sandra Day O'Connor, John Paul Stevens, Byron R. White
Justices Dissenting
Harry A. Blackmun, Warren E. Burger, Lewis F. Powell, Jr., William H. Rehnquist
Place
Washington, D.C.
Date of Decision
28 March 1983
Decision
That a state retirement plan which paid lower benefits to women than to men violated the Civil Rights Act.
Significance
The decision effectively prevented employers from offering annuity plans thatoffer men and women unequal benefits.
With the erosion of traditional pensions, employers throughout the country began offering their employees the opportunity to enroll in deferred compensation plans. Employees who enrolled in these plans saved a portion of their earnings in tax-deferred accounts, which allowed them to postpone paying federalincome tax on these dollars until they retired.
The state of Arizona worked with several investment companies to offer this benefit to its employees. The companies generally offered three different types of payment options upon retirement: a single lump-sum amount on retirement,payments of a certain amount over a certain period of time, or monthly payments of an agreed amount through the end of the person's life known as annuitypayments.
Natalie Norris worked as a supervisor in the Arizona Department of Economic Security. In 1975, she began contributing to a deferred compensation plan offered by the state, choosing the annuity or monthly payment option. After contributing for a period of time, she learned that at retirement, she would receive $34 a month less than male state employees who deferred the same amount ofcompensation and would retire at the same time. All of the companies offering annuity plans to state of Arizona employees used mortality tables which calculated monthly retirement benefits. These tables incorporated the fact thatwomen live longer than men, and would therefore receive less money per month.Norris attempted to address this issue to the state and the retirement companies but was unable to resolve the situation. She then filed a class-action suit in the U.S. District Court for the District of Arizona, alleging that theplan violated Title VII of the Civil Rights Act of 1964 by discriminating onthe basis of gender.
The district court agreed that the plan violated Title VII and ordered the state to stop using the gender-based mortality tables and to pay those female employees, who had already retired, benefits equal to those paid to men. The state appealed to the U.S. Court of Appeals for the Ninth District and lost. The state then asked the Supreme Court to review the case, on certiorari. In a 5-4 decision, the Court agreed that the plan violated Title VII.
The opinions themselves were split amongst the justices, but in essence, theCourt found that under Title VII, gender could not be properly used to predict longevity. In addition, Title VII required employers to treat employees asindividuals, not as members of a class such as gender, race, or religion. Although the retirement plan companies had developed the discriminatory mortality tables, the state was legally responsible since it had entered into a contract with the companies on behalf of the employees. While some of the justicesfelt that previous Court decisions on related issues gave the state and benefit companies fair warning to change their policies, thereby making them liable to pay "back benefits" to already-retired employees, they were in the minority. The Court majority found that, due to the extraordinary financial burden that would be placed on the companies in order to provide these "back-benefits," a revised plan removing the gender discrimination would not be retroactive.
While the Court's ruling effectively prevented employers from offering unequal retirement benefits to men and women, its initial impact would be on men. In an interview with Time, Michael Stuntz of the American Council on Life Insurance said, "It looks as if proportionately more men would have theirpensions reduced while more women would have their pensions increased."
Related Cases

• Califano v. Goldfarb, 430 U.S. 199 (1977).
  
• Spirt v. Teachers Insurance and Annuity Assoc., 735 F.2d 23 (2nd Cir. 1984).